nf7-s and 137 gb hard drive

I just bought my 160 gb maxtor hard drive and when i started to format it, i got a message about data loss. It said that i would lose data over 137 gb. Does that mean forever, or is there some way I could format it now, and download the microsoft sp1 later which is supposed to support it, and it will work?

Also, I need a boot disk to install my new hard drive. How do I make one? (I have an old hard drive with xp running. I just don't know how to make a boot disk).

Thanks for your help. I really hope I don't have to lose the other 23 gb on my hard drive

generally the size limit is first an issue with your BIOS, then with the OS. WinXP should have an option in the add/remove programs section to make a bootdisk (but not too familiar with XP so not sure). Why not try downloading SP1 first then installing the HDD? But I still think its a BIOS isue. cause on the paperwork I got with my WD200Gig it said that many older boards do not support drives larger than 137 w/o extra drivers/updates (hence why the drive came a with a little IDE controller), tho my board could support it, so it all really depends.